Consumers reminded to watch out for in-app purchases

The Commerce Commission is
today reminding consumers about the potential to
accidentally make in-app purchases when using applications
(apps) on their mobile devices.

“With the school
holidays in full swing, now is a good time to remind parents
to keep an eye on the apps that their children may be
downloading,” said Ritchie Hutton, Commerce Commission
Head of Investigations. “In-app purchases can add up
quickly and lead to significant costs.”

Consumer
protection organisations overseas have received a large
number of complaints about in-app purchases, which has
resulted in some positive changes in how mobile platform
providers advertise apps. As a result, many apps now
disclose that they contain in-app purchases.

Apps are
often free to download but many require in-app purchases to
maximise the experience of the app. These purchases may
include paying to avoid a delay in gameplay, buying upgrades
or buying extra content. Offering in-app purchases in free
to download apps is a very successful revenue making model
and has become widespread. For example, during June 2014, 47
of the 50 ‘Top Grossing’ apps on Apple New Zealand’s
iTunes store were free to download.

Consumers,
particularly children, may not understand that buying
in-game currency and other in-app purchases require the
payment of real money.

“In-app purchases are often
displayed in ways that have been specifically designed to
maximise the chance that a consumer will take up the
opportunity to buy. This practice is particularly evident in
children’s games where children are often faced with
repeated prompts to make a purchase,” said Mr
Hutton.

Many consumers are also unaware that in some
cases, once you enter your password to download an app from
the app store, the password stays live for a period of time.
This means that if devices are then given to children, they
can make subsequent purchases without parental
consent.

The good news is that anyone can change the
settings on their devices so that the password must be
entered every time. There are also ways to restrict the
purchase of in-app purchases completely.

The Commission
has the following tips for consumers to reduce the risk of
running-up unexpected bills on their mobile devices.

1. Check apps for in-app purchases

When downloading an
app, especially free ones, check for information on what
features the app has, including in-app purchases. This
information is usually now made clearer for consumers. Look
for the words “Offers in app purchases”.

Apps sold in
Apple’s store have lists that set out each individual
in-app purchase and the maximum price you can pay for a
single in-app purchase. Check reviews of an app online
before downloading it, for other users’ experiences and
opinions.

2. Change your password settings

Check
how long the default time is that your password will remain
active on your device once you have entered it. For example,
the default settings on some devices have a 15 to 30 minute
password window where you don’t need to re-enter your
password for additional purchases.

You can remove this
password window in your device’s settings. Your settings
may change depending on what version of software you have
installed on your device so it pays to check when you
upgrade your software.

3. You can turn off in-app
purchases

Most devices have the ability to stop any in-app
purchases. Check your device settings.

4. Check your
bill regularly

Check your app store bill regularly so you
know what purchases are being made on your account.

If only you know your app store
password, you will know when your credit card is being
charged. Just remember to also change the default setting
for how long your password remains valid after the first
time you enter it.

6. You do have rights

If you do
end up in a situation where in-app purchases have been made
without your knowledge or permission, you can apply for a
refund from your app store provider. If you come across
conduct you believe may be misleading or deceptive under the
Fair Trading Act, let the Commerce Commission know by
calling 0800 943 600 or visiting www.comcom.govt.nz.

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